Overseas stock markets surge on $960B European loan plan

EPA/EVERETT KENNEDY BROWNJapanese businessmen walk past a Nikkei stock index board in downtown Tokyo, Japan today. Japanese stocks traded up on news of Eurozone Plan to ensure stability in the EU region. The Nikkei 225 Stock Average rose 166.11 points, or 1.6 percent, to start the week at a closing of 10,530.70.

Stocks surged around the world, the euro strengthened and commodities gained as European policy makers unveiled a $960 billion loan plan to end the region’s sovereign-debt crisis.

The MSCI World Index rose 2.4 percent to 1,125.48 as of 5:15 p.m. in Tokyo. Standard & Poor’s 500 Index futures rallied 4.1 percent. The euro appreciated 2.3 percent to $1.3046. South Korea’s won jumped 2 percent against the dollar, while the cost of protecting Asian bonds from default fell the most in more than a year and a half. Crude oil gained 3.8 percent.

Governments of the 16 euro nations today agreed to lend as much as 750 billion euros ($962 billion) to countries under attack from speculators. The European Central Bank said it will counter “severe tensions” in “certain” markets by purchasing government and private debt. Concerns that the Greek financial crisis will spread wiped $3.7 trillion from the value of global stock markets last week.

“In the short-term, it may be viewed as a positive and we may recover some of the losses we had in equities last week,” Oscar Pulido, a portfolio specialist at BlackRock Inc., said in a briefing in Seoul today. “In the longer-term, it’s going to be very much dependent on whether governments in these countries can truly take the measures to reduce the deficits they’ve accumulated.” BlackRock managed $3.36 trillion in assets as of March 31, according to its Web site.